What have been called the “most sweeping oil and gas reforms” in Colorado history will be on their way to the governor’s desk if the Senate accepts changes made in the House, changes that are meant to allay the industry’s concerns but have sparked new worries about loss of local control over drilling.

The sponsors have stressed that Senate Bill 19-181 is intended to change the focus of state regulators’ role under the law from fostering and regulating oil and gas development to just regulating the industry. Another major focus is clarifying that cities and counties can use their planning and land-use powers to regulate oil and gas as they do other industries and activities.

“We are giving local governments more control over oil and gas (well) siting and nuisances that they have not had before,” House Speaker KC Becker, one of the primary sponsors, said during debate last week. “I think these improvements are a critical first step in addressing some imbalance in the way we treat oil and gas in this state.”

If the Senate approves the House amendments to the bill this week, the bill will then go to Gov. Jared Polis, who has supported the legislation.

However, some of the amendments worry those who want cities and counties to have more say over oil and gas development within their borders. Of particular concern are changes and additions that say state and local regulations must be “necessary and reasonable.”

The bill originally said the state couldn’t act “arbitrarily and capriciously” when imposing regulations, which would be a higher legal hurdle for companies if they challenge the rules.

“It’s a much higher threshold of scrutiny, and we feel a lot of local governments will not want to try to regulate for fear of litigation,” Anne Lee Foster of Colorado Rising, a community advocacy group, said in an email Monday. “The industry regularly uses the threat of a lawsuit to intimidate and coerce for their gain. Many threatened communities have already experienced that.”

Sara Loflin, executive director of the League of Oil and Gas Impacted Coloradans, said in an email that while her organization would have preferred the original language, the ability of state and local governments to protect public health, safety and environment remains intact.

“Overall, SB181 is an important foundational victory for impacted Coloradans,” Loflin said.

Senate Majority Leader Steve Fenberg, another of the bill’s prime sponsors, said he too worries that the language lost some of its teeth.

“There’s some language in the bill that I wish we did not have to put in there, and that’s not because I want local governments to do things that are unnecessary and unreasonable,” Fenberg said. “It’s because I fear that the industry will use it against local communities to remove some of the authority that we’re attempting to give them through the bill.”

Adams County Commissioner Eva Henry worries about that, too.

“My concern is local governments will spend more time in court defending necessary regulations that keep our communities safe and healthy. No other industry has this kind of protection,” Henry said in an email.

Even so, Fenberg said, comparing the current laws and regulations to what’s in the bill “is like night and day.”

“You have to be honest about the shortcomings, but we also have to be honest that this is still sweeping reform,” Fenberg said.

Many of the amendments were offered to try to reduce the industry’s opposition to the bill, Fenberg said.

Testimony for and against the bill in six committee hearings and in the full House and Senate was intense. The Colorado Petroleum Council has been airing TV ads urging people to ask their legislators to stop the bill.

“A few of the amendments begin to address some of our concerns. The process has a ways to go and we’ll have to see what happens in the Senate,” Scott Prestidge of the Colorado Oil and Gas Association said in an email.

Once the bill becomes law, the work is far from over. The Colorado Oil and Gas Conservation Commission, the main regulatory body, and the Colorado Department of Public Health and Environment will have to write rules to carry out the law. The process will include public hearings and is expected to take several months and even, with some issues, more than a year.

Lance Astrella, a Denver attorney who represents land and mineral owners and communities in oil and gas issues, said the new language regarding regulations makes it more ambiguous for cities and counties, but that could be better in the long run.

“I’m happy to see (local governments) have more power. It’s extremely important that priority be given to health, safety and environment,” Astrella said.

But Astrella said he would hate to see local governments go too far and wind up in court in “takings” cases, with companies arguing they had been illegally deprived of their property rights. He said the revised language might help avoid those conflicts.

Barbara Green, an attorney who has represented cities and counties in oil and gas matters, said the party challenging the regulation will still have to prove that it’s unnecessary and unreasonable.

“Legislative enactments are presumed to be constitutional. This act does not change the law,” Green said in an email.

Colorado Rising called another amendment “a huge loophole.” The amendment deals with forced pooling, which allows a company to drill oil and gas if just one of the mineral owners in an area agrees.

Originally, the bill said a majority of mineral rights owners would have to consent before a company could drill, but the House lowered the threshold to 45 percent. The amendment was a response to industry concerns that it would be nearly impossible for most companies to drill in a stretch along the Front Range. That’s where Anadarko Petroleum owns a checkerboard of surface and mineral rights, making it difficult for another company to get enough mineral owners in one area to agree.

“It was an unintended consequence that gives Anadarko a kind of monopoly,” said Astrella, adding that he doesn’t think the amendment will solve the issue.

Foster of Colorado Rising thinks the change will make it more difficult for mineral owners who don’t want drilling. She said the provision doesn’t provide due process for unknown mineral owners.

Other House amendments would:

Change the oil and gas commission from a part-time, volunteer body to a full-time, professional commission. The amendment reduces the number of members to seven from nine, five of whom will be appointed by the governor. The heads of the state health and natural resource departments will be non-voting members.

Clarify that local governments can regulate air quality.

Strengthen air-quality protections by clarifying that emissions can be regulated from pre-production activities to drilling to completion and directing the oil and gas commission to consider requiring devices to further restrict emissions.

Judith Kohler joined The Denver Post in August 2018 and is part of the business team, writing about energy, aerospace, agriculture and other topics. She spent 21 years with The Associated Press, covering politics, government, energy and the environment in Colorado and Wyoming.

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